With more than one million page views and more than 4,000 items, this blog provides news and commentary on public policy, business and economic issues related to the $3 billion California stem cell agency, officially known as the California Institute for Regenerative Medicine(CIRM). David Jensen, a retired California newsman, has published this blog since January 2005. His email address is djensen@californiastemcellreport.com.

Wednesday, July 23, 2014

Directors of the $3 billion California stem cell agency meet
tomorrow in the San Francisco Bay Area, but the hottest topic is not on
the agenda, and that is the Trounson Affair.

Alan Trounson
SF Business Times photo

The term is shorthand for the host of questions raised
by the appointment July 7 of Alan Trounson, former president of the agency, to the board of StemCells, Inc. The company is the recipient of $19.4
million from the agency, cash that was awarded under unusual circumstances on a narrow 7-5 vote.(See here and here.)

Two days after Trounson’s appointment, the agency’s
new president, Randy Mills, announced a “full review” of the activities
involving StemCells, Inc., a publicly traded firm based in Newark, Ca.

News and commentary about the matter has slowly
emerged since the appointment. None of it reflects well on the agency, which is
trying to devise some way to secure public or private funding beyond 2017 when
the cash for new awards runs out.

The most visible article appeared in the Sunday Los
Angeles Times, which has a readership of 4 million in print and online. Michael Hiltzikwrote that cronyism is rife at the California Institute for Regenerative Medicine(CIRM),
as the agency is formally known. He
said,

“How bad are the conflicts? When the (29-member) board
considered a proposal earlier this year to spend $16 million to attract three
star scientists to California, so many members had to recuse themselves that
only nine were left to vote. (Six ended up voting in favor.)

“When conflicts of interest are so rife that only
one-third of your board can weigh in on a major policy issue, that's tantamount
to not having any board at all.”

Other articles appeared in the San Diego U-T and the
San Francisco Chronicle. The Orange County Register published an editorial that
said the agency has “operated as a cash cow for a tiny circle of well-connected
individuals and institutions.”

The Trounson appointment “reignites charges of
cronyism,” said a headline on allgov.com. Pete Shanks of the Biopolitical Timeswrote,

"Let's be blunt: This looks like a pay-off. Technically, what Trounson and (Irv) Weissman (of Stanford) and StemCells, Inc., just did may not be illegal. But it's shameless.”

The talk ricocheted around California’s stem
cell community. One longtime reader of the California Stem Cell Report, who is
a patient advocate, said in an email that Trounson’s conflicts of interest are “now
even more transparent and make the previous grant decisions even more suspect.”
“Self-dealing” is how this supporter of stem cell research described the
situation.

Another reader and knowledgeable
observer, who also must remain anonymous, described the Trounson
appointment as “brazen.” And yet another who is quite familiar with the
agency said,

“No one seems to understand what conflict of
interest means. I don't understand how they can even think that it is OK
to do this.”

We should note that these remarks come from persons
who back stem cell research and the agency.

In some ways, however, public attention to the
matter could be described as minimal. The stem cell agency is little known to most
people, and the Trounson Affair did not garner front page headlines. But like some
sort of immortal cell, the stories will live on. Twenty years ago, the
individual stories would have faded, buried in the morgues of the mainstream
media. However, today, given Google searches, they will become embedded in all
future reporting about the agency – not to mention knife-edged opposition
research should another bond measure be placed before voters to fund the
agency.

The Trounson Affair also highlights the need for the
agency to stiffen its revolving door restrictions – the regulations that would
have prevented his immediate appointment to a post at an enterprise that has benefited
from the agency’s largess. It is a problem that will grow as the agency nears
its financial demise. CIRM staffers will naturally be looking for places where
they can find future employment.

The state has some minimal laws restricting future
employment by agency personnel. But the agency needs to do more, a difficult
task given that such action basically will change the terms of employment for
staffers. But failure to confront the issue will only lead to more debacles.

CIRM’s “full review” of the situation is well-taken.
However, the agency has not publicly defined even generally what a full review entails nor
has it responded to questions from the California Stem Cell Report about the
nature of the inquiry. The agency also has not indicated whether it is seeking an
outside, independent entity to conduct the review. One possibility would be
State Controller John Chiang, who is the chairman of the only state body (the
Citizens Finanancial Accountability and Oversight Committee) charged with
oversight of the agency. Another would be the state’s Fair Political Practices
Commission, the state department charged with enforcing conflict of interest
laws.

One California researcher and CIRM grant recipient has
noted that the flap obscures the work that the stem cell agency has done. In a
comment filed on an item on the California Stem Cell Report, Jeanne Loring,
director of the Center for Regenerative Medicine at The Scripps Research
Institute, said that despite “the errors in judgment” at the agency,

“CIRM is at the heart a remarkably effective driver
of cutting edge research. By focusing on a narrow area of research and
encouraging international collaboration, CIRM has singlehandedly pushed the
whole world's stem cell research forward. If CIRM were a drug company, it would
be considered miraculous that so many promising treatments are in the pipeline
just eight years after it started."

Loring makes a good point. And it would be a shame
if the good work of CIRM is discredited because of a failure to deal
forthrightly, quickly and publicly with conflict of interest issues at the
agency.

About Me

The California Stem Cell Report is the only nongovernmental website devoted solely to the $3 billion California stem cell agency. The report is published by David Jensen, who worked for 22 years for The Sacramento Bee in a variety of editing positions, including executive business editor and special projects editor. He was the primary editor on the 1992 Pulitzer Prize-winning series, "The Monkey Wars" by Deborah Blum, which dealt with opposition to research on primates. Jensen served as a press aide in the 1974 campaign and first administration of Gov. Jerry Brown. (Time served: two years and one week.) He writes from his sailboat on the west coast of Mexico with occasional visits to land. Jensen began writing about the stem cell agency in 2005, noting that it is an unprecedented effort that uniquely combines big science, big business, big academia, big politics, religion, ethics and morality as well as life and death. The California Stem Cell Report has been identified as one of the best stem cell sites on the Internet. Its readership includes the media (both mainstream and science), a wide range of academic/research institutions globally, the NIH and California policy makers.